The Key SR Levels MT5 Indicator is a very useful tool to analyze the forex markets. This part of technical analysis is easy to understand for beginners. Support and resistance come in many different forms that many traders are familiar with, such as swing highs and swing lows, Fibonacci levels, trend lines, moving averages, Bollinger bands, pivot points, and more.
But there are already key levels in the markets that traders can use and find without using complicated tools or custom indicators. These levels may also act as powerful support and resistance points. Key levels act as magnets, drawing traders’ attention. The collective psyche of market players creates these levels. In the forex market, these levels are represented as round numbers that often serve as support and resistance points.
How to use the indicator
It’s not difficult to figure out why critical levels work time and time again. Humans like simplicity, which implies dealing in whole numbers. Whole numbers are widely used as entry and exit points by traders.
Another reason why key levels function is that large corporations and organizations pay attention to them. Several central banks create price ranges for their currencies to trade in. When prices reach the lower or higher end of these price ranges, central banks often interfere, either directly or verbally.
Using horizontal lines, traders may quickly mark the important levels on the chart. This may be accomplished by locating prices on the chart that finish in two zeros. If the price in the current symbol is stated in five or three digits, the final zero is ignored.
For the trader, the key levels may be helpful in a number of ways. Traders might wait for price to reach these important levels before entering a trade against the trend. Traders call this type of entry “fading the market.” Of course, this tactic will work better if combined with other technical analysis tools, including trend lines, Fibonacci levels, classic support and resistance, etc. This strategy of entering the market may provide the trade with the best possible entry price, and it is able to use this strategy in line or against the trend as the trader likes.
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